News

Published on
Oct 26, 2015

Switzerland prepares to legalise iGaming in regulatory overhaul

Switzerland’s Federal Council is moving forwards with plans to revamp the country’s gambling legislation, in a move which would see land-based casino operators become eligible to apply for iGaming licences and a tax on winnings scrapped.

The draft law aims to significantly expand the country’s gambling market through the launch of online casino products, and by lifting restrictions on small stakes poker tournaments. It also attempts to stem the tide of unlicensed sites targeting Swiss customers by blocking illegal offerings, as well as introducing stricter controls to ensure a high standard of consumer protection.

While the Council has not suggested an exact date at which it is likely to be enforced, sources suggest the new legislation will apply from 2019.

A new body, governed by a board comprising representatives of law enforcement agencies, will be established to oversee the re-regulated industry. Half of the board members will be appointed from the federal authorities, with the other half coming from Cantonal bodies.

Replacing the 1998 Gaming Act and the 1923 Lottery Act, the draft law has been formulated to “take into account social and technological developments,” the Federal Council explained.

"Thus the existing ban on operating gambling games online will be repealed,” it said. “Casinos can ask for an extension of their concession to enhance their offerings through an internet site.”

Casinos will see no change in the rate of tax they pay, with the revenue raised to be used to fund the country’s insurance scheme for old people and the bereaved. Lotteries, sports betting and skill game operators will still require a Cantonal licence and remain under their supervision, with proceeds raised through the tax on these games used entirely for charitable causes in the fields of culture, welfare and sport.

Changes to the legislation have been under discussion for a long time, with the Council launching a consultation on the gambling law in May last year before releasing the new, amended proposals.

Key to these changes will be updated consumer protection guidelines, with operators required to devise suitable addiction prevention controls such as suspensions for players displaying unhealthy gambling habits, as well as effective treatment for pathological gambling.

This will be supported by the Federal Gaming Board and inter-Cantonal supervisory authority for gambling, Comlot, which will provide support services to operators, working with addiction specialists. The federal government is also proposing to block unlicensed operators in a bid to ensure all sites comply with its consumer protection standards.

Finally the bill addresses a major discrepancy, which currently sees winnings from sports betting and lotteries taxed while casino winnings remain tax-free. The Council has moved to remove this inequality by making all winnings tax-free, ensuring the licensed real-money offerings can remain competitive and continue to generate money for charitable causes.

News that the changes to existing legislation are being officially considered has been met with a generally positive reaction from gambling industry groups, though many have also picked out flaws in the legislation.

The Swiss Casino Federation says that the bill has been improved from the legislation published for consultation last year, but still requires some additional changes. It argues that the legalisation of online casino games needs to come into force faster, the range of approved online products must be expanded, and more aggressive measures be taken against illegal operators in order to stop rapid declines in revenue.

“In recent years Swiss gambling venues are under pressure,” the Federation explained. “Turnover has decreased by 30 per cent since 2007, and this trend shows no sign of stopping.

“Swiss casinos are losing market share of over CHF300m per year to foreign internet casinos, illegal gambling clubs in the country and casinos near the borders of neighbouring countries.”

It also criticises the fact that despite being permitted to launch online, casinos will still be restricted to a small range of products, rather than allowed to launch lottery, sports betting or skill games.

In contrast, lottery operator Swisslos adds that while it agrees with the bill in principle, there is a danger that disproportionate consumer protection controls and any move to further expand casinos’ product range online could be severely damaging for the industry.

It believes that Switzerland’s consumer protection standards are among the highest in Europe, and more stringent controls would only serve to aid the growth of unlicensed offerings. It also argues that lotteries must be protected, in order to preserve the money raised for charitable causes.

As a result it believes that the legislation should be passed with no changes whatsoever.